Vana Trading Co., Inc. v. SS" Mette Skou"

• Decision Date: 20 May 1977
• Docket Number: No. 547,Dockets 76-7386,76-7393,76-7417 and 76-7446.,986,679,987,547
• Parties: VANA TRADING CO., INC., Plaintiff-Appellee-Cross-Appellant, v. S.S. "METTE SKOU", her engines, boilers, etc., and Flota Mercante Grancolombiana, S.A., Defendant-Third-Party Plaintiff-Appellant-Appellee, v. Ove SKOU and International Terminal Operating Co., Inc., Third-Party Defendants-Appellees-Cross-Appellants.
• Court: U.S. Court of Appeals — Second Circuit

556 F.2d 100

VANA TRADING CO., INC., Plaintiff-Appellee-Cross-Appellant, v. S.S. "METTE SKOU", her engines, boilers, etc., and Flota Mercante Grancolombiana, S.A., Defendant-Third-Party Plaintiff-Appellant-Appellee, v. Ove SKOU and International Terminal Operating Co., Inc., Third-Party Defendants-Appellees-Cross-Appellants.

Nos. 547, 679, 986, 987, Dockets 76-7386, 76-7393, 76-7417 and 76-7446.

United States Court of Appeals, Second Circuit.

Argued March 11, 1977.

Decided May 20, 1977.

Purrington & McConnell, New York City (John Hay McConnell and Stephen A. Agus, New York City, of counsel), for plaintiff-appellee-cross-appellant, Vana Trading Co., Inc.

Renato C. Giallorenzi, New York City, for defendant-third-party plaintiff-appellant-appellee, Flota Mercante Grancolombiana, S.A.

Haight, Gardner, Poor & Havens, New York City (Chester D. Hooper, Vincent M. DeOrchis and M. E. DeOrchis, New York City, of counsel), for defendant-appellee Ove Skou.

Hill, Rivkins, Carey, Loesberg & O'Brien, New York City (Martin B. Mulroy and Bruce J. Hector, New York City, of counsel), for third-party defendant-cross-appellant-appellee, International Terminal Operating Co. Inc.

Before SMITH and FEINBERG, Circuit Judges, and TENNEY, District Judge.^*

TENNEY, District Judge:

This admiralty cargo suit involves the damage and loss to a shipment of yams. It also represents an invitation to apply to cargo suits the doctrine of proportionate fault recently made applicable to collision and stranding cases by United States v. Reliable Transfer Co., 421 U.S. 397, 95 S.Ct. 1708, 44 L.Ed.2d 251 (1975), an invitation which we decline.¹

Suit was brought by Vana Trading Co., Inc. ("Vana"), the consignee of the yams, against the S.S. Mette Skou and her time-charterer, Flota Mercante Grancolombiana, S.A. ("Flota"). Flota impleaded the owner of the vessel, Ove Skou ("Skou"), and the stevedoring company at New York, International Terminal Operating Co. Inc. ("I.T.O.") as third-party defendants.² After trial District Judge Milton Pollack held on the evidence that the loss was caused by a combination of circumstances attributable to Vana, the consignee, to Flota, the time-charterer, and to I.T.O., the stevedore. Vana Trading Co., Inc. v. S.S. Mette Skou, 415 F.Supp. 884, 887 (S.D.N.Y.1976). He further held that allocation of liability for damages proportionate to each party's comparative degree of fault was appropriate. Accepting the parties' agreement "that the degree of fault allocable to each party cannot be determined to a mathematical certainty," id. at 888, Judge Pollack confirmed the allocation of damages contained in that agreement without prejudice to their rights of appeal with respect to such allocation.³ Finding the allocation between Vana and Flota improper, we reverse.

The facts and findings as developed on the trial are as follows. The S.S. Mette Skou was time chartered from her owner, Skou, on a New York time charter form dated April 26, 1974. The form contained the usual clause 8 which made the captain and crew the borrowed servants of the charterer, Flota, and not servants of the shipowner, Skou, for the purpose of loading, stowing and discharging cargo on the ship. When the Mette Skou arrived at Cartagena, Colombia in mid-June 1974, Flota advised the vessel's officers that Flota had booked 5,000 cartons of yams. These yams had matured in November or December 1973 but were allowed to remain in the ground from that time until they were harvested in March 1974, after which they remained in stowage sheds until June 15, 1974 when the shipper, Exportadora Andina Ltda. ("Andina") individually wrapped them in unprinted newspaper and packed them into cardboard boxes which contained only two hand holes and a slit for ventilation. They were then trucked to Cartagena, stored in a government warehouse and delivered to the pier on June 18 or 19, 1974, subsequent to the vessel's arrival. At that time only the deep tanks and several `tween decks on the vessel were empty and available for cargo. The shipper, Andina, examined the deep tanks and the ventilation system servicing them and did not object to the storage of the yams in the deep tanks.

The shipment involved herein, together with two other shipments of yams, were loaded aboard the S.S. Mette Skou under deck and stowed in the port and starboard No. 3 hatch deep tanks at the direction of the Master. The cartons were stowed 10-13 tiers high with 2 X 4's between every third tier. The cartons were set out about eight to nine inches from the wings of the tanks with air channels both fore and aft and athwart ship, each about six to ten inches wide. Ventilation was provided by two six-inch service pipes which extended at the sides to the main deck. The electrically-operated ventilation for the deep tanks was run continuously through the entire voyage until the yams were discharged at New York.

At the time the yams left Cartagena, Flota delivered to Andina's forwarding agent a bill of lading dated June 19, 1974, executed by Flota's Cartagena agents both on behalf of Flota and for and on behalf of the Master of the vessel, which acknowledged receipt in Colombia of the 5,000 cartons of yams in apparent good order and condition and stated that they were consigned to the order of Vana at New York.⁴ The Instituto Colombiano Agropecuario of the Republic of Colombia's Ministry of Agriculture issued a certificate stating that the yams, to the best of the inspector's knowledge, were substantially free from injurious diseases and pests, and were believed to conform to the current phytosanitary regulations of the United States.

Although the S.S. Mette Skou arrived in New York on the morning of July 1, 1974, Flota and I.T.O. failed to begin discharge of the yams until July 2, 1974, despite a request by the vessel's officers that discharge begin immediately after arrival. Furthermore, after discharge, the cartons were placed in I.T.O.'s warehouse, which was not adequately ventilated. When the yams were delivered to Vana by I.T.O. on behalf of Flota they were in a damaged and cooked condition, exhibiting excessive heat, moisture, sprouting and tissue breakdown.

Judge Pollack concluded on the basis of the foregoing that the third-party claim of Flota against Ove Skou, the owner of the vessel, should be dismissed with costs assessed against Flota. We agree. The trial judge found that the officers of the vessel participated in the loading of the cartons of yams as agents for Flota, and not on behalf of the shipowner. He further found "that the ship was not unseaworthy; that ventilation was not warranted in the charter party but in fact existed and that the ventilation was appropriate in the deep tanks for the shipment of merchantable cargo delivered on board in good condition, properly packed and wrapped." 415 F.Supp. at 887.⁵ On the record we find no reason to disturb these findings or his legal conclusion. Nichimen Co. v. M.V. Farland, 462 F.2d 319 (2d Cir. 1972); International Produce, Inc. v. S.S. Frances Salman, 1975 A.M.C. 1521, 1544-45 (S.D.N.Y.1975).

We cannot agree, however, with the trial court's allocation of liability between Vana and Flota. On this issue, we read Judge Pollack's opinion as holding that there was no inherent vice in the yams and that they were delivered to the vessel in good order and condition, free of latent pathological disease or injury. 415 F.Supp. at 887. Although Judge Pollack stated that "the most that can be said is that the yams were in susceptible condition for the results which followed their preparation for shipment, stowage, transportation, delayed discharge, warehousing and delivery," id., such a condition does not amount to an inherent vice. The Supreme Court has accepted a jury charge defining the latter term as "`any existing defects, diseases, decay or the inherent nature of the commodity which will cause it to deteriorate with a lapse of time.'" Missouri Pacific R.R. v. Elmore & Stahl, 377 U.S. 134, 136, 138-39, 84 S.Ct. 1142, 1143, 12 L.Ed.2d 194 (1964).⁶ By using the term "susceptible" in this context Judge Pollack would seem to have meant only that the yams were particularly able to be affected by the conditions under which they were packed, stowed and unloaded and not that their condition was such that they would have deteriorated merely through "a lapse of time." Moreover, Judge Pollack found that "the damage suffered by the cargo was caused by the conditions to which it was subjected in transit, and not by any inherent defects," and that "the damage was due to a combination at least of the circumstances created or contributed to by the shipper and the Charterer and was enhanced by the manner of performance of I.T.O. of its obligations." 415 F.Supp. at 887. Specifically, the shipper's packing of the yams—"which produced a cooking effect"—and the charterer's stowage of the yams—"which caused the yams to continue the cooking process and decay"—combined, along with the conduct of I.T.O., to cause the damage. Id.

The primary problem concerns the trial court's reliance on the Supreme Court's recent decision in United States v. Reliable Transfer Co., supra, which extended the doctrine of proportional fault to property damage in maritime collisions and stranding cases, and its failure to apply the correct rule for apportioning damages as determined by the Supreme Court over forty years ago in Schnell v. The Vallescura, 293 U.S. 296, 55 S.Ct. 194, 79 L.Ed. 373 (1934).⁷ As was stated in David Crystal, Inc. v. Cunard S.S. Co., 223 F.Supp. 273, 287 (S.D.N.Y.1963), aff'd, 339 F.2d 295 (2d Cir. 1964):

"There is no rule in cargo damage cases which requires the damages to be either equally apportioned among the parties negligent as in mutual fault collision cases . . . or to be proportioned among the parties at fault as in maritime personal injury cases. . . ."

The Court's action in Reliable Transfer Co., while bringing the rule in collision cases into...